A US debt default could trigger a nightmare scenario that many economists have been warning about. Eventually this shit pile of debt will have to be dealt with but is this the moment ? One thing is for sure, this can easily be avoided but as usual politicians like to play Russian roulette.

The following are 12 very ominous warnings about what a U.S. debt default would mean for the global economy…

#7Chinese vice finance minister Zhu Guangyao: “The U.S. is clearly aware of China’s concerns about the financial stalemate [in Washington] and China’s request for the US to ensure the safety of Chinese investments.”

#8The U.S. Treasury Department: “A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse”

#9Goldman Sachs: “We estimate that the fiscal pull-back would amount to 9pc of GDP. If this were allowed to occur, it could lead to a rapid downturn in economic activity if not reversed quickly”

#12Bloomberg: “Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just weeks away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever seen.”

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The benefits of the wonder plant hemp are massive and Colorado has recently passed an amendment to enable the cultivation of production of hemp within the state. Capable of growing 6 feet in two weeks, it could provide a big boost to the community. Anything that generates revenue and provides employment needs to be taken seriously. In this case a natural product which has a multitude of uses including generating oil, fibre used to fortify products, clothing and a food source. Even hemp oil has been claimed to have properties to cure cancer. The wonder plant indeed. 🙂

(NaturalNews) The recent passage of Amendment 64 in Colorado, which legalizes the cultivation and recreational use of marijuana throughout the state, is having a major impact on the state’s agricultural sector. But the biggest potential for economic growth may actually come from marijuana’s non-psychoactive cousin hemp, which is right now being planted on U.S. soil for the first time in 60 years, thanks to the initiative’s passage.

According to reports, a 60-acre plot of land in the southeastern corner of Colorado will be brimming with hemp plants. It will be the first time that hemp has been grown commercially on American soil in more than 60 years, and many more plots of land throughout the Rocky Mountain state are expected to follow suit, as the latest figures estimate that the hemp industry will outpace the marijuana industry by a factor of 10 or more.

“I believe this is really going to revitalize and strengthen farm communities,” says Ryan Loflin, the man who intends to plant America’s first hemp crop on his 60 acres of arable land, which formerly supported alfalfa.

Hemp is not marijuana, and there is no legitimate reason for its continued prohibition by the Feds

Many Americans are still unaware that there is even a difference between hemp and marijuana, both of which are prohibited by the federal government from being cultivated on U.S. soil. But unlike marijuana, hemp contains little-to-no THC (tetrahydrocannabinol), the psychoactive component of marijuana that gets people “high,” which means that hemp cannot be smoked, and thus cannot be not used as a drug.

To the contrary, hemp is an amazingly robust industrial plant, the various components of which can be used in a variety of commercial and nutritional applications. Hemp seed oil, for instance, and hemp protein are popular, omega-3 fatty acid-rich food products consumed by millions of health-conscious individuals. Hemp fiber is also sometimes used to reinforce concrete and to fortify automobile bodies and frames. And beyond this, hemp naturally cleanses soil and water, which makes it a powerful force for good in the environment.

“Hemp is food, animal feed, fiber, fuel, shelter,” says Lynda Parker, a Colorado-based hemp supporter and founding member of a pro-hemp coalition in the Rocky Mountain state, as quoted by The Denver Post. “It cleans the air, the water, the soil. Hemp could be enormous for Colorado because we’re the first state to legalize it.”

But as previously mentioned, hemp somehow got lumped into the same category as marijuana as far as the federal government is concerned, which means Americans have been deprived for over half a century of reaping its many practical and economic benefits. Virtually all of the hemp used today in American products has to be imported from places like Canada due to legal prohibitions that block its cultivation here at home.But all of this is changing in Colorado, where a reanimated hemp industry is quickly emerging from the dust bins of history, and reviving the economic climate of struggling rural Colorado. Similar to the current situation in many other states, many rural communities in Colorado have long suffered from a lack of healthy industry. But hemp could set the state on a whole new course toward economic prosperity that will most assuredly be the envy of the rest of the country.“This is monumental for our industry,” says Bruce Perlowin, CEO of company known as Hemp Inc. “It will unlock a clean industrial revolution that will be good for the economy, good for jobs and good for the environment.”To learn more about the many benefits of hemp, as well as America’s rich, but little-known, hemp history, be sure to visit:http://hemphistory.org/

Jim Willie is not one for holding back and in his latest interview with Silverdoctors sums up where the global financial system currently stands. With each passing week the situation worsens. Willie see a global financial collapse now close at hand and the endgame will be triggered by a small-medium sized bank failure in Europe.

The European collapse will ignite a global Gold rush as the only remaining safe haven ultimately ending USdollar as worlds reserve currency.

The Doc began by asking the Golden Jackass what will most likely be the trigger event for a complete systemic collapse:

I don’t think we’re going to see a default as a trigger event in gold or silver. I didn’t say we won’t see a gold and silver default, I said that it won’t be the trigger. There are just too many deep sources for gold that the central banks have access to. I refer to Basel Switzerland, the Roman catacombs, and the BOE, I think they’re pretty close to the bottom of their gold barrel, but they have big powerful friends in Rome and Basel Switzerland.

The trigger is not even going to come from within the US, because it’s just so controlled- the markets are being controlled from multiple different centers, in particular the Federal Reserve and the Treasury Dept, JPM, Goldman Sachs.

It’s just so corrupt to the core, and we’re seeing a blossoming of the fascist business model and the corruption that’s accepted.

Attention should be drawn to Europe. Look at some of the most recent events that are really quite staggering.

The Italian elections kicked out the GSax preppy Mario Monti. I’m surprised that he’s not being thrown off a palace balcony. It’s directly in response to hikes that Monti imposed on property tax to finance the bankers! The Italian people have a much more effective political system than the US!

Italy actually has elected a comedian! This is like electing John Belushi to form a coalition government! Mario Monti is on the way out. What does that mean?

The defense of their dead banks with liquidity lines and property tax hikes will end in the near future!

In Spain you have new high level financial corruption events that have paralyzed the nation at a time when they’ve already seen a string of big financial firm failures!

This at a time where they have 25% unemployment. I think that the likelihood of violence on the streets is greater in Spain than in any other country.

Spain’s bank insolvency and wretched unemployment is causing tremendous distress, and there will be a breaking point there.

Then in France you have Hollande, the leader of the socialist clowns has raised the highest tax brackets to 90%. The resulting capital flight to Scandinavia is astounding, leaving the nation extremely vulnerable.

Then you have the German economic slowdown which is really capturing some attention, which will remove ability and patience of bank rescues.

Then you have the London banks which are joined by French banks in broad deep exposure to Southern Europe. They’ve set themselves up to have their heads cut off.

Recall that the Draghi solutions like LTRO were recently insulted by debt downgrades, which was unprecedented.

Then you have the USFed, which is the only buyer of USTBonds, and the Euro Central Bank as the only buyer of PIIGS Govt Bonds.

Here is a note as to the stress in the system: the European banking system received $1.2 trillion in Dollar Swap funds from the NY Fed in January alone to prop up the ECB banking system.

European banks are collectively much larger than the US banks, but are in suspended animation while the US banks are being supported by narcotics money laundering.

A big European bust is coming. When the European bust events occur, the mad scramble for safety will be on, and they’re not going to be looking for Switzerland any longer because of their Euro peg. A massive rise in the European gold price is coming and it will be staggering, shocking and not reversible. It will ignite a global Gold rush, a massive short covering rally, and powerful 30% to 50% rise in the gold price will come in response to the European collapse.

Following that will come the arrival of the Gold Trade Finance platforms. Gold settlement for trade across the world- primarily though coming out of the East.

In other words, trade involving two parties not involving the US, one of them being an Eastern nation, and they will settle not in dollars anymore, they will settle in gold, and they will have some help from their friends in Turkey.

We’re going to see an end to the USDollar reserve status following these events, and the funeral will have a speech given by the Saudis to bring an end to the Petro-Dollar itself.

You have to look to Europe and not to the US, the US is a joke in regards to crisis, management, propaganda, the ESF, narcotics money laundering, sponsored fraud, it’s just unbelievable what’s going on in the US, it’s not going to be the trigger, the trigger will be Europe.

We have 15 to 20 potential sites to force the breakdown. It’s not just one or two. Every couple months there are a few more potential areas to cause the breakdown. That’s very, very dangerous, and new. We didn’t see that 3-5 years ago. Back in 07 it was really just sub-prime. We have about 12 different areas now which are just as dangerous as sub-prime, and both of them are in Europe.

With QE4 and the recent return of NINJA loans as the Fed attempts to re-inflate the housing bubble, The Doc asked Willie whether the Fed would be able to kick the can down the road one more time with one last bubble:

They have 15-20 fingers and toes, but there are just too many different areas that they need to plug.This real estate bubble is a joke. There’s no new bubble coming or even on the horizon. What we’ve got is the US government has sponsored a whole new round of sub-prime mortgages. Expect instead of the big banks underwriting them, it’s the Federal government. We have not seen a rebound in demand for housing, even though the 30 year mortgage rate is under 4% and has been for quite a few months.

What’s not shown in the press is that there’s still 10 million homes that are sitting on the bank balance sheets. They’re called REO’s, and they’re selling their REO’s or short sales, which ARE NOT INCLUDED IN THE CASE SHILLER INDEX!

It’s a parallel of the discouraged workers no longer included in unemployment! They’re bringing labor market calculations to the housing market. They’re not going to revive the housing bubble for a simple reason- there’s not widespread finance available, it’s exclusively coming out of the FHA. The other reason is that people have a great distrust for buying homes after they saw so many people foreclosed on. Another reason is that the people don’t have brisk income.The factors are not there, it’s kind of a lunatic claim to state that the housing market is going to be re-bubbalized. Not even close, it’s stuck in a depression!

The Doc asked Jim whether we face a lost two decades like the Japanese, or what type of collapse we face in the US:

I said this back when Lehman Brothers fell in the autumn of 2008. The US is on a path that cannot escape systemic failure and total dependence on the printing press to cover its debt and for a debt default of the US government debt, which will come in the form of a global conference to organize and co-ordinate the debt write down. There will be US military outside the room to make sure everyone complies.

If the US goes ahead with sequester cuts, they’re talking about $4 trillion over 10 years. I cannot emphasize how small that is. But let’s go through some of the points why I believe the collapse is at our doorstep:

The collapse is happening now- it’s no longer ultra-slow motion like 2 years ago. It’s a new event every few days or weeks. The pace is quickening.

The extreme nature of current events is alarming. Just in the last few months:

The US Fed announces every month their extension of 0% forever (denigrating their own exit Strategy talk).

$1.2 trillion was doled out by the USFed to European banks in January alone!

We have the Germans demanding repatriation of their official gold account (Allocated Accounts).

We have the Italians electing a comedian like John Belushi to halt the property tax hikes that bail out banks. This is an insult to their entire political system which experienced that Mario Monti appointment without an election.

We have the London banks recently sponsoring a Chinese Yuan Swap Facility, cow-towing to Asia. This is unprecedented! New York will not do such a thing, but London did, which means that London and NY might be at odds!

We have an attack announced on Mali in North Africa to wrest gold & uranium timed when the Germans asked for repayment of their gold reserves. The quantities really fit. There was a suspicious comment by the French and British saying it will be repaid in 7 years. 300 tons over 7 years is approximately what Mali produces in gold that will cover almost exactly the German repayment. That was organized by France and the US.

We have the shutdown of the gigantic Mongolian copper & gold mine by Rio Tinto which is an example of resource nationalism.

We have raids larger and bolder of the GLD inventory that prevents a COMEX default and will produce a bigger price discount vs. the spot for GLD shares. I think it will go down towards a 20% discount, which will cause alot of problems.

We have the USFed preparing for QE5 (or rather QE187, as in QE to Infinity).

We have events like the major central banks losing credibility while engaging in open currency war. The franchise system of central banks is being questioned. They’re in battle with each other.

We have the US facing a fiscal cliff, which forces a quantum leap in job cuts (recession alert).

We have the Japanese ratcheting up the competitive currency devaluations (only USTBond buyer).

We have the Swiss managing their Euro-Franc peg, but suffering losses in Japanese & British bonds.

We have the Russians hosting a G-20 Meeting to coordinate the alternative to US$-based trade. THEY ARE NOT GOING TO CONTINUE WITH DOLLAR BASED TRADE SETTLEMENTS! NOT GOING TO HAPPEN!!

We have the emergence of Turkey and soon India as gold trade finance intermediaries. They’re going to supply 1 of 2 parties engaged in trade with gold so they can make the settlement of the trade.

We have the Iranian sanctions coming to a conclusion in US acquiescence. The US is surrendering to the Iranians! All these events have occurred just since the new year began less than two months ago! The pace of extreme events is quickening!

Extreme events have become the norm, putting tremendous additional stress on the system which the boys are trying to manage. They don’t have enough people, enough resources, enough channels, and they don’t have enough brains to do it.

The managed system cannot succeed, it’s too complex. They are attempting to work towards a system of total system management, and it’s just not going to work.

A series of climax events is coming very soon. The changes will be rapid and breath-taking.

Vast wealth has been moving East the past 3-4 years, and with it great power. Look for some seemingly minor bank failure to cause a ripple effect of deeper damage. It’s going to involve larger banks tied with commitments such as counter-party contracts or intermediary supply functions, and things are just going to start wrecking.

I think vast wealth is going to be lost in the US and the West, except by gold and silver owners. Owning gold and silver will become harder to do because the rules are becoming stricter.Those who have set themselves up in the last few years are going to be the big, big winners, and the ones who are bold enough and brave enough to do it now are going to be glad for their actions.

I have a family member who refused my advice three years ago, and now that family member is facing the conversion of her very large privately managed IRA pension fund into these new special Treasury bonds. That’s going to cause a real firestorm by the public, and they’re going to wish that they had converted their IRA’s into a gold account.

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It would come as no surprise to anyone that the US’s largest banks use dodgy accounting practises to hide a multitude of sins. The following from Washington’s Blog explores the myth that American banks are much smaller that their european counterparts. Truth is, they are much better at hiding under the existing US accounting standards. Were international standards to apply, the banks may actually be twice the size they claim to be.

When Internationally-Accepted Accounting Methods Are Used, American Banks Are the World’s Largest

In the face of such overwhelming criticism, apologists for America’s largest banks say that they are smaller than their European and Asian competitors … and that they have to be big to compete.

Current Vice Chair and director of the Federal Deposit Insurance Corporation – and former 20-year President of the Federal Reserve Bank of Kansas City – Thomas Hoenig destroyed that argument earlier this month.

That label, like a similar one on automobile side-view mirrors, might be required of the four largest U.S. lenders if Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., has his way. Applying stricter accounting standards for derivatives and off-balance-sheet assets would make the banks twice as big as they say they are — or about the size of the U.S. economy — according to data compiled by Bloomberg.

“Derivatives, like loans, carry risk,” Hoenig said in an interview. “To recognize those bets on the balance sheet would give a better picture of the risk exposures that are there.”

U.S. accounting rules allow banks to record a smaller portion of their derivatives than European peers and keep most mortgage-linked bonds off their books.

World’s Largest

JPMorgan, Bank of America and Citigroup would become the world’s three largest banks and Wells Fargo the sixth-biggest. Their combined assets of $14.7 trillion would equal 93 percent of U.S. gross domestic product last year, the data show.

***

U.S. accounting rules for netting derivatives allow banks to erase about $4 trillion in assets, the data show. The lenders also can remove from their books most mortgages they package into securities, trimming an additional $3 trillion.

Off-balance-sheet assets and derivatives were at the root of the 2008 financial crisis. Mortgage securitizations kept off the books came back to haunt banks forced to repurchase home loans sold to special investment vehicles.

***

The U.S. Financial Accounting Standards Board and the International Accounting Standards Board pledged a decade ago to converge the two bookkeeping systems. After six years of meetings, they remain divided. Proposed rules for how much money banks need to set aside for loan losses may make European and U.S. lenders even less comparable.

***

“Having no uniform standard is challenging for issuers and users,” said John Hitchins, head of U.K. banking and capital markets at PricewaterhouseCoopers in London. “Analysts and investors can’t compare companies’ financials across borders. Banks have to prepare multiple versions of their financial statements in different countries where they have units.”

***

If the banks used international standards for derivatives and consolidated mortgage securitizations, the ratio for JPMorgan and Bank of America, the two largest U.S. lenders, would fall below 4 percent. It would be just above 4 percent for Citigroup and Wells Fargo.

That would make the biggest U.S. banks look no better capitalized, or worse, than European peers such as HSBC at 5.6 percent or France’s BNP Paribas SA at 3.9 percent at the end of last year. It also could require them to raise more capital. Spokesmen for all four banks declined to comment.

***

“The U.S. leverage ratio doesn’t capture off-balance-sheet risks,” said [former FDIC boss] Bair, now chairman of the Systemic Risk Council, a private regulatory watchdog. “Once U.S. banks start publishing the new Basel-mandated ratios, more off-balance-sheet assets will become obvious.”

***

Bair said she favors raising the simple capital ratio as high as 8 percent. Hoenig, the FDIC vice chairman, has called for 10 percent. U.S. regulators are still debating how to implement the rules. Because Basel isn’t an international treaty, each country needs to adopt its own version.

***

Progress on common standards slowed after Mary Schapiro became SEC chairman in 2009 and faced lobbying by companies opposed to what they said would be costly accounting changes, according to four people with knowledge of the discussions who asked not to be identified because the talks were private.

***

After failing to agree on common standards for derivatives netting and consolidation of securitizations, rule-setters are now heading in different directions as they debate how to account for loan-loss reserves.